Open Season

Stricter FEHB requirements from OPM aim to root out ineligible members

Starting in this year’s Open Season, agencies will be required to validate participant eligibility for a random sample of at least 10% of FEHB enrollments.

Drew Friedman@dfriedmanWFED

April 17, 2024 6:21 pm

3 min read

After reports of the high costs ineligible FEHB members create, the Office of Personnel Management is setting more stringent requirements for agencies to validate enrollees in the Federal Employees Health Benefits program.

Starting in Open Season this fall, agencies will be required to validate participant eligibility of a random sample comprising at least 10% of FEHB elections for both Self-Plus-One and Self-and-Family enrollments.

OPM noted that 10% is the minimum for validation, and is encouraging agencies to validate larger portions of enrollees when possible. Agencies have to report their enrollment reviews to OPM by July 2025. If agencies find ineligible members through the sample collection, they’ll also have to follow instructions for promptly removing them, OPM said in a benefits administration letter Wednesday.

“Today’s actions build on years of progress addressing issues in FEHB enrollments,” OPM said. “Collectively, these requirements ensure that agencies are verifying documentation provided during each of the key periods when an employee might make a change.”

The new requirements for agencies come after a 2022 Government Accountability Office report found that OPM may be spending up to $1 billion each year on ineligible enrollees in the governmentwide health insurance program, which covers 8 million participants.

“The longer OPM delays its efforts to establish a monitoring mechanism to identify and remove ineligible program members, the more ineligible members and related improper payments in the program may continue to accrue, costing the program millions, or up to approximately one billion dollars per year, according to OPM’s own estimate,” GAO said in the 2022 report.

Beginning in 2025, federal employees will also be required to provide eligibility documentation for any family members they want to add to their insurance coverage during Open Season.

Identifying ineligible dependents has remained a top challenge for FEHB since 2018. In 2021, OPM first put regulations in place to monitor family member eligibility during a member’s initial enrollment, or during qualifying life events. Before 2021, OPM was not asking FEHB enrollees for any verification of family members’ eligibility for health insurance coverage, and instead only using “self-certification.”

OPM’s new requirements, announced this week, now mark even stricter requirements, now verifying family members who get added to FEHB elections during Open Season, the time of year when many participants are actually adding new individuals to their plans.

OPM also just recently completed an FEHB “Master Enrollment Index” that’s meant to root out any irregularities in existing FEHB enrollments. OPM said it will then further review any irregularities that the index finds, and keep agencies informed of those reviews.

The challenges in FEHB eligibility verification have gained attention in Congress as well. The FEHB Protection Act, which Sens. Rick Scott (R-Fla.) and Tom Carper (D-Del.) introduced in March, would similarly require OPM to verify eligibility before adding new members to the health care program. If enacted, the bill would also require an audit of FEHB to remove any invalid members who are currently enrolled.

“By confirming eligibility, we have the potential to save taxpayers hundreds of millions of dollars annually,” Carper said about the bill. “I look forward to working with my colleagues and OPM to ensure they have the resources and tools needed to end improper payments and root out fraud in the FEHB.”

As part of its fiscal 2025 budget request, OPM is also proposing legislation to build a centralized enrollment system for FEHB — which could help relieve some of the challenges of ineligible members in the system. That system would be modeled after the centralized system OPM has just recently built for the upcoming Postal Service Health Benefits program.

“Current FEHB eligibility determination and enrollment is highly decentralized and requires cooperation between nearly 100 employing offices responsible for determining eligibility and enrolling more than 8 million members,” OPM said. “If funded, OPM could extend this same central enrollment system to all FEHB enrollments, which would allow OPM to manage and make consistent all FEHB enrollments and remove individuals who cease to be eligible for the program.”